Hong Kong is becoming more and more dependent on its neighbour Guangdong. Last year trade surged 24 per cent to 380 billion yuan. In January alone, trade was up 25.6 per cent on the same month last year, pointing the way to another year of massive growth.
Even more stunning is the robust growth in cargo and container shipments by river, the main mode of transport of these goods. Figures from the Port Management Authority revealed that from 1989 to 2003, river cargo throughput skyrocketed 554 per cent to 59 million tonnes. It probably gained another 7 per cent last year.
This phenomenal growth far outperformed seaborne cargo throughput, which gained only 130 per cent to 149 million tonnes, and perhaps another 10 per cent last year. River cargo probably accounted for 27 per cent of total cargo throughput last year.
Equally breathtaking is the growth of river containers. During 1995 to 2003, river container throughput rocketed 274 per cent to 5.9 million teu (20-foot equivalent units); it probably gained another 10 per cent last year. Seaborne container throughput gained only 32 per cent to 14.5 million teu, and perhaps another 8 per cent last year.
A direct beneficiary might be a very boring and perhaps forgotten company called Chu Kong Shipping. The company fits the bill of what I look for in an undervalued stock: a reviving business, out of the headlines - so boring and so small that most analysts and investors have overlooked it.
Chu Kong is essentially a sea- and land-freight forwarder specialising in cargo and container forwarding between Hong Kong and Guangdong.